The role of R&D expenditures in people's innovative potential

Abstract

The role of investments in a knowledge-based economy, which is the only way to be competitive and innovative, especially in a time of economic crisis, is increasing. R&D expenditures are important indicators of innovative performance and the best countries in the European Union invest the most finance in the area of research and development. The relationship between financial support for innovation and people, as holders of creativity and new ideas, is obvious. This paper focuses on the importance of R&D investments and researchers in the most innovative countries of the European Union. The hypothesis is based on the fact that researchers represent the most educated people in the population and bring innovation into the economy and help economic growth. The aim of this paper is to analyse and compare the R&D expenditures of five of the most innovative countries of the European Union, measured by the number of patent applications ranked in 2012, and people's innovation potential. The hypothesis of this article is based on the assumption that higher R&D expenditures in the government and business sector of selected countries should lead to a higher number of researchers in the monitored countries followed by an increasing number of patent applications as a result of innovation activities in companies. Using the Eurostat and World Intellectual Property Organization (WIPO) database for the period 2007-2011, the paper analyses and compares dependent variables, represented by the number of researchers, to R&D expenditures by a linear regression method. The main results of the analysis are compared among selected countries of the EU and show the dependency of these two factors and their importance in innovation.